Doctors and the State: The Politics of Health Care in France and the United States 9780822378655

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Doctors and the State

DAVID WILSFORD

Doctors and the State The Politics of Health Care in France and the United States DUKE UNIVERSITY PRESS

Durham and London

1991

© I99I Duke University Press All rights reserved Printed in the United States of America on acid-free paper 00 Library of Congress Cataloging-in-Publication data appear on the last printed page of this book.

TO JAMES AND HELEN WILSFORD AND TO PIERRE AND FRAN\=OISE CANLORBE

Contents

List of Tables IX List of Figures Xl Acknowledgments

X111

I.

Introduction: Comparing Organized Medicine and Health Policies in France and the United States

2.

Unity and Fragmentation of the French State

3.

The Fragmentation of the Stateless State: The Effects of Absolute Liberalism on Politics in the 56 United States

4.

Cohesion and Fragmentation of Organized Medicine in France and the United States 84

5.

The Continuity of Crisis: Patterns of Making Health Policy in France, 1978-1990 118

6.

Policy Issues in France: State Reforms and Medical Resistance

29

161

7.

Public and Private Forces in the American Health Universe 181

8.

Patterns of Making Health Policy in France and the United States

9.

221

Consequences for the Political Activities of Organized Medicine 238

viii / Contents 10.

Conclusion

262

Appendix A: Glossary of Abbreviations 293 Appendix B: Medical Unions and Associations in 295 the French Hospital Sector Notes 307 References 329 Index 349

Tables

1. 1.

National Medical Consumption as Percentage of GDP,

1. 2.

1950-1987

I I

Social Welfare Expenditures in GECD Countries, 1960-1981

13

1.3.

French and American Health Care Expenditures,

I.4.

Total Health Expenditures and Health 21 Status, 1985 Physician Incomes, I970-I98 I 25 Percentage of National Personal Income, Before Taxes, Received by Each Income Tenth in the United States 66 Income Shares of American Family Units 67 Medical Associations and Ideal Interest Group Types 9I American Medical School Graduates, 1964- 1983 French Medical Enrollments and Graduates,

1960-19 81

1. 5. 3.1.

3.2. 4.1. 4.2. 4.3.

196 4- 1 9 84

5. I.

5.2.

5.4.

5.5.

I985

97

126

Number of Private Practitioners Adhering to 128 the Convention, December 3 I, 1984 Distribution of Private Practitioners by Specialty and Convention Category, December 31, 1984 I29 Evolution of Medical Personnel by Category, 1978-1984

5.6.

95

Sickness Funds Ranked According to Density of Private Practitioners per roo, 000 Inhabitants, December 31,1984 122 Average Levels of Reimbursement Fixed by the CNAMTS,

5.3.

I4

13 1

Quotas Established for Second-year Medical School Examinations, 1976-I987 132

x ! Tables 5.7. 5.8. 5.9.

5. ro. 5. II. 6. I. 6.2. 6.3. 7.1. 7.2. 7.3. 7.4.

8. I. 9.1. 10. I. 10.2. 10.3.

The Feminization of the French Medical Corps 133 Average Annual Incomes of French Physicians 136 Medical Density of Paris and Surrounding Region, January 1,1985 138 Distribution of French Medical Personnel in Private Practice, December 31, 1984 140 Ten Measures of the Plan Seguin 150 Public Hospitals in France, 1985 163 Private Hospitals in France, 1984 164 Distribution of French Hospital Medical 164 Personnel, 1986 Ideal Types of Medical Practice in the United States 203 Starting HMOs and PPos Versus Starting 204 Independent Practice Typical Benefits Coverage for an HMO or PPO 204 Typical Premium Schedule for Individual 207 Membership in an HMO, 1987 Where French Group Leaders Go in the Face of an Unresponsive Administration 228 Occupational Distribution of the French 250 National Assembly Government Expenditure as Percent of Total Health Expenditures, 1960-1985 276 Physician Reimbursement Systems 289 Relative Strength of State Regulatory 290 Intervention

Figures

1 . I.

4. I. 4.2.

5. I. 5.2. 5.3. 6. I. 6.2. 9.1.

10. I. 10.2.

Growth of French and American Health 12 Expenditures American Medical School Graduates, 1946-1983 96 Comparison of American Medical School Graduates and French Students Admitted to Second Year 98 and French Medical School Graduates Medical Graduates in France, 191~1986 130 Growth in Number of Practicing Physicians 131 in France, 1970-1984 Number of Private Practitioners in France 135 by Age Group and by Sex, 1984 Organization of Medical Studies in France, 1981 170 Organization of Medical Studies in France, 1986 171 Health and Legal Professions in the French National Assembly, Represented as Percentage of Elected 251 Deputies, 1967-1986 Explaining the Influence of Organized Medicine in 274 France and the United States Total Health Expenditures in Seven OEeD Countries 278

Acknowledgments

A number of medical association officials and French civil servants took an exceptional interest in this project. They not only met with me numerous times, but also provided me with information and documentation which I would not otherwise have discovered, and often shared confidential files with me. Among the medical association officials were Jacques Beaupere, president of the Confederation des Syndicats Medicaux Franc;ais (CSMF); Andre Dogue, director of the Association Confederale de la Formation Continue; Mary-Ange Glandieres, then-president of the CSMF Dcpartement Montpelier-Lodeve; Jean Marchand, president of the Federation des Medecins de France (FMF); Pierre Canlorbe, professor of medicine at the Universite de Paris (Rene Descartes) and president of the Syndicat Autonome des Enseignants de Medecine; Jacques Lafourcade, retired professor of medicine and former official of the Syndicat Autonome; Michel Garbay, president of the Syndicat Garbay (principal association of hospital physicians); and Pierre Burin, president of the Syndicat Garbay Departement Vienne. Among the civil servants were in particular Jean-Franc;ois Girard, Directeur-General de la Sante, and Jean de Kervasdouc, Directeur des Hopitaux. Many other medical association officials and civil servants met with me. Their assistance has been invaluable to the completion of this study. They will remain anonymous, but their help was not less important because of this. Librarians at the Faculte de Medecine, the Institut d'Etudes Politiques, the Ecole des Hautes Etudes en Science Sociales (all in Paris) and the Faculte de Sciences (Toulouse) were particularly helpful in providing me with much specially requested information, including rare copies of ancient theses. My participation in conferences sponsored by the Centre National de Recherches Scientifiques and by the Ministcre de l'Education Nationale (through the Societcs Savantes) permitted me to test my preliminary findings with other social scientists, medical economists, and physicians. The editors and staffs of the Concours Medical, the Panorama du Mc-

xiv / Acknowledgments

decin, and the Quotidien du Medicin were exceptionally helpful and lowe them a great debt. In the United States many scholars followed the progress of this project and criticized it vigorously. Among the most helpful were Arend Lijphart, Henry W Ehrmann, Peter Gourevitch, Richard Madsen, Gary Jacobson, David Laitin, Michele Ruffat, Frank L. Wilson, John Ambler, John Goodman, John T. S. Keeler, Thomas Koelble, Paul Godt, and Victor Rodwin-and their help was invaluable even if their advice was not always followed. In the health care sector, both Marilyn Messer and James T. Howard were generous with information, advice, and support. Pascale Wilsford and Katherine Girvin always helped with technical and substantive assistance. James A. Caporaso and Lawrence D. Brown were extremely helpful with editorial advice on different portions of this study. Theodore Marmor read the entire manuscript several times with great care and his advice has improved the final product immeasurably. I also wish to thank Deborah Stone. Her comments helped to strengthen the presentation of my argument significantly. None of these individuals, of course, shares any responsibility whatsoever for this study's shortcomings. I am most grateful to the French government for the privilege of serving as a Chateaubriand Fellow. The fellowship financed my field work in France during 1985-86. I am also grateful to my colleagues at the Universite de Paris XII, at the Institut d'Etudes Politiques, and at the Ecole des Hautes Etudes en Science Sociales for their hospitality and counsel. A Chancellor's Associates grant from the University of California, San Diego, funded a portion of my travel to and in France in 1984 and 1985. Another Chancellor's Associates grant in 1986 helped to fund a survey questionnaire to leaders of organized medicine in France. I am also grateful to Betsy Faught, Judy Lyman, and Christine Vaz for facilitating my early work in the Department of Political Science at the University of California, San Diego. At the University of Oklahoma, Donald J. Maletz, V Stanley Vardys, Geri Rowden, and Shelley Swim have all assisted this study in many important ways. The Research Council of the University of Oklahoma supported later stages of my research with much material support. Fellowships and travel grants gave me the time and the resources to revise and expand the French and the American materials and to incorporate the United Kingdom, Canada, West Germany, and Japan into a more comprehensive comparison in the final chapter of the book. Particularly important in this process was the opportunity to travel twice to Japan

Acknowledgments / xv to interview officials and gather documentation. Two successive chairs of the Department of Political Science at the University of Oklahoma, V. Stanley Vardys and Donald]. Maletz, have encouraged this research both with great enthusiasm and concrete actions that only chairs can take. The Carl Albert Center of the University of Oklahoma and its director, Ronald Peters, have also supported this research, materially and "spiritually." All of my colleagues at the university have been intellectually stimulating to this work. I also wish to thank Brent Lollis for very important graduate research assistance. At Duke University Press, I am especially grateful to Richard Rowson and Valerie Milholland for their advice and support throughout the long process of writing and revising this book. Parts of this study appear in earlier, exploratory forms in the Revue Fran(aise des AJfoires Sociales, in Le Concours Medical, in Giorgio Freddi and James W Bjorkman, eds., Controlling Medical Prcifessionals: The Comparative Politics if Health Governance (London: Sage), in James A. Caporaso, cd., The Elusive State (Beverly Hills: Sage), and in the Journal if Health Politics, Policy and Law. Papers reporting preliminary findings were presented to conferences or annual meetings of the Centre National de Recherches Scientifiques, the Societcs Savantes, the Association Fran~aisc des Etudes Americaines, and the American Political Science Association. Some ideas developed in this study were first presented as special lectures at the Confederation des Syndicats Medicaux Franc;ais, the Fondation Nationalc des Sciences Politiques, and the University of California, San Diego. Finally and foremost, my thanks go to my wife Pascale Wilsford, my daughter Caroline Wilsford, my son Christopher Wilsford, my parents James Wilsford and Helen Wilsford, and my parents-in-law Pierre Canlorbe and Franc;oise Canlorbe. Each of them lent her or his full support and encouragement to this study, although Caroline and Christopher were more exasperated by the enterprise than the rest. Pascale Wilsford was also generous with professional advice and assistance, especially in the preparation and analysis of the survey questionnaire and in the important nuances of cross-cultural! cross-linguistic research. Unless otherwise indicated, all translations from French are mine. Unattributed quotations have always been taken from personal, confidential interviews.

Doctors and the State

Introduction: Comparing Organized Medicine and Health Policies in France and the United States I.

A physician, put to sleep in 1900 by a magic spell, awakens in 1930. The countryside and the cities are transformed. Empires have fallen. But medicine has changed little. Like 30 years before, the physician treats weak hearts, calms stubborn coughs, softens expectorations, but he almost never changes the outcome of illnesses which if benign, heal alone, and if serious, almost always kill. A second physician, drowsing off in 1930, is roused from his lethargy in 1960. He recognizes absolutely nothing: acute meningitis, tubercular meningitis, acute tuberculosis, general infections, malignant endocarditis, bronchial pneumonia all can be cured. Addison's disease can be treated, pernicious anemia is no longer pernicious, surgeons open hearts and brains, hemotologists save newborn babies by replacing their blood, psychiatrists become chemists and correct serious disorders of the spirit. Sound waves, lamps, rays and microscopes probe the organs, the tissues, the cells, and even molecules (Bernard, 1966). Physicians once were harassed practitioners of dubious medicine. Then with great improvements in science and technology and in their own organizing, physicians became prestigious dispensers of health. It was the end of the nineteenth century. Physicians' successes were so impressive that gradually everyone claimed a right to them. Through governments and labor unions, the sick obtained more and more access to health care. However, more access meant more money paid to physicians and their helpers for the goods and services required to operate the industry of health. Subsequently, governments, labor unions, and employers started to question the financial commitment that had grown up around them-and which continued to grow. So physicians came under attack. Some physicians were better than others at resisting attack, at least for a time, and some attacks were more effective than others. This book seeks to understand why this has been so by focusing on the rclations between organized medicine-important providers of health care-and the public and private payers of that health care. The book compares this relationship between physicians and payers in

2 / Introduction France and the United States. I will concentrate on the contemporary, postwar period, especially the 1970S and 1980s, although the earlier history of medicine's organization and the growth of health is certainly important to the story that I will tell here. I The two countries are suited for comparison because they provide a useful contrast of approximate extreme types along two dimensions: First, France's system quickly evolved into what Roemer (1977) classifies as a public insurance system (cf. Wilsford, 1988; Galant, 1955). The American system, however, has remained more or less resolutely free enterprise in spirit, and largely (though less and less) in fact. These differences are manifested in the distribution of public and private sources of financing health care in the two countries: In 1982, 74.8 percent of the financing of the French health care system was public; 25.2 percent was private. In the United States, only 43 percent of financing was public; 57 percent was private (cf. Heidenheimer et aI., 1990 : 62). Second, France and the United States exemplify strong versus weak state traditions in the health care sector. The French state tradition of Colbert and Rousseau, in which the state uniquely embodies and protects the general interest, has constituted one important underpinning of state autonomy in health. This contrasts with the American tradition of the "stateless" state wherein the free play of political forces is thought to result in the common good. In the United States, state autonomy in making health policy has been weak as many health interests, especially physicians, have exploited many political openings into the state to their advantage. Yet both France and the United States are advanced industrial democracies which have experienced similar economic expansion and recession in the postwar period. Equally important, each country also permits free and abundant medical association activity. Physician organizations are numerous and active in the organization of health care delivery systems and in the politics that affect their health care system interests. Moreover, in both countries the medical profession succeeded in using the rise of science and technology at the close of the nineteenth century to establish hegemony over legitimate health care delivery. Most striking, orthodox medicine succeeded in both countries at defining what constituted legitimate. But the political success of organized medicine in the postwar period has varied. The first argument this book makes is about this difference. In general, French physicians have seen a decline in their political power starting in the 19505 and continuing to the present.

Introduction / 3 American physicians, by contrast, enjoyed almost unvarying (and hard-won) political success until the rise of competition from corporate medicine and the intervention of private employers and insurers in health care decisionmaking from roughly 1975 to the present. Even so, today American physicians continue to be more politically successful than their French counterparts. Economic pressures on all welfare states have induced states and private insurers to act upon the prerogatives of traditionally favored interest groups such as physicians. The French state, with its "strong" state structures, has been able to shape health care politics more effectively than the "weak" American state. The differences in the distribution of authority and in the tactical advantages available to the French and American states explains what professional associations have chosen to do politically and their effectiveness-and it explains some of the varying success of the two states in controlling health care expenditures. Although officials in both countries consider health care costs a grave problem, there are significant differences in their respective health care expenditures. In 1987, health care expenditures in France totaled 8.6 percent of GDP compared to I 1.2 percent of GDP in the United States (CREDES, Ero-Sallte, 1989). We will see subsequently, however, that the lack of strong state responses in the United States has been filled partially by private insurers and employers. This points to the second argument this book makes, that of universalism between the two cases. In fact, the study shows, the traditional and hard-fought claims of professionalism based upon scientific expertise-claims advanced everywhere by organized medicine-and the social prestige and economic rewards that have resulted from these claims have eroded in the face of the "fiscal imperative" in health care. This imperative has driven the financiers of care, governments, private insurers, and employers, to relentlessly try to curb the traditional prerogatives of health care providers, especially physicians. In chapter 10 I will layout a more systematic test of this second argument by subjecting the findings which emerge from the French-American comparison to initial evidence drawn from Britain, Canada, Japan, and West Germany. Each of these countries is a large, advanced industrial democracy that is characterized by a sophisticated, complex health care system. A common locus of policymaking everywhere is the confrontation of scarce resources to pay for health care with a rising demand for and technical capacity to provide the care. Each health system is characterized by a highly organized medical profession with distinct perceptions of its interests and the desire to

4 / Introduction

press its claims regarding health policy upon the political system. But all these countries are also characterized by the increasing inabilityor more accurately, unwillingness-to pay for so much expensive care. Hence, difficult choices face public policymakers and private managers in each system about how to organize and how to pay for the extensive delivery of high-quality health care. Such choices never fail to affect deeply the way physicians practice medicine, as well as the social and economic rewards that they mayor may not enjoy by practicing their profession. The book, therefore, makes a complex, dual argument. On the first hand, what are the conditions that underlay a significant difference cross-nationally in the influence of organized medicine in the shaping of health policy and the organization of the health system? On the second hand, are there universal forces leading to an erosion of organized medicine's influence over time in every country? In particular, this second argument challenges an earlier view that dominated our understanding of physician influence on health policy for some time. Marmor and Thomas (1970), for example, argued that whenever there was a dispute about methods of provider payment, physicians always won. There was strong evidence in support of this view and others like it. But in twenty years scholars of comparative health policy must reverse themselves. In the struggle to finance increasingly expensive health care systems, public officials and private insurers-as well as coalitions of contributors, especially employers-have striven mightily to curb the autonomy of health providers, especially physicians. Physicians are a common target because their crucial gatekeeping position in health care delivery makes them an easily identifiable linchpin of the system. Governments and insurers everywhere pursue reforms that restructure and redesign the supply side of the health care system. These reforms eventually curb clinical autonomy and contain physicians' income in every advanced, industrial democracy. Well-organized groups of providers (physicians) may delay reforms in some countries, depending on the character of the political system. They will do so in part by advancing claims of expertise. But in no country will physicians avoid these reforms forever because the huge costs underlying the fiscal imperative in health care will eventually override even the most aggressive professional arguments. This argument points to one fundamental similarity between the conclusions I draw today and those of health policy scholars of a generation ago. Both then and now, the evidence at hand suggests that it

Introduction / 5 is the character of the policy domain that drives politics over the lon~~ term rather than the reverse. That is, there is a universal logic in health care that drives policies toward the same goals across countries and across cultures. This holds in spite of the fact that over the short term there is clearly broad variation across countries and cultures in the timing of policy, in the nature of policy instruments, and in the distribution of health care responsibilities.

DATA AND METHODS

The bulk of this study falls between the single-country treatment of a traditional case study and a wider comparative effort. Restricting the comparison to two countries should provide deeper insight into decisionmaking and negotiating processes within the state and the medical profession than would be possible with a more aggregated approach. But explicitly comparing two countries, rather than concentrating on only one, should also permit an evaluation of the activities of medical associations and bureaucratic and political actors against a better comparative backdrop than would be possible with a single-country study. The cross-national approach enables a more careful weighing of the determinants of policy than a single-country study would permit and a distinguishing between the culturally specific and the more general factors that affect political behavior and policy outcomes. This study focuses on the political: that is, the shaping of what is possible between and among diverse, often conflicting interests. The methods used here are therefore less quantitative and more qualitative than may be typical of similar studies. Quantitative studies, of course, are essential to the demonstration of aggregate relationships, but they contribute less to contextual knowledge. Also, health care studies in particular often confine their focus to evaluations of the equity or efficiency of health care systems. But the politics which constrains or provides opportunities for system formation and reform, as well as the pursuit of professional and consumer interests within the system, often fall outside the capabilities of quantification. To appreciate the importance of the contextual variables which structure health care politics, I will address systemic, historical, and cultural factors across the two countries. This approach is complementary to both single-nation case studies and aggregate analyses. First, contextual variables-such as the "strong" versus "weak" state traditions or the character of shifting alliances between interests-are

6 / Introduction

less tangible and difficult to evaluate quantitatively. Second, this approach should shed light on alternative ways of organizing policymaking in health care that are not necessarily considered within a single cultural-political system. Evans (1986:25) stated this point best: "Nations do not borrow other nations' institutions .... The point is that by examining others' experience you can extend your range of perceptions of what is possible." For two years in France (1984-86), I conducted interviews with about forty-five people. The length of each interview varied from about one to two-and-a-half hours. I interviewed medical association activists and highly placed functionaries in ministries dealing with health care matters. Medical association activists made up a little over two-thirds of the total. In addition, a lengthy questionnaire was administered to 255 presidents and general secretaries at the departmental level of the Confederation des Syndicats Medicaux Fran~ais (CSMF), the principal medical association of private practitioners. The questionnaire comprised ten pages of detailed closed and open questions. Eighty-four responded. Fifteen national delegates of the Syndicat Autonome des Enseignants de Medecine also participated by answering the questionnaire. Their answers to the open-ended questions are used as a source of qualitative data on the thinking of medical professors and hospital physicians. Many of the questions of this survey were suggested by similar ones in the survey undertaken by Suleiman in his seminal study of French administration (1974). In general, almost all respondents to the questionnaire completed not only the closed questions but also gave detailed answers to the open questions. I have used this as a source of qualitative data in addition to the quantifiable data from the closed questions. Finally, various archival sources were mined for contemporary and historical information. In France I was permitted unlimited access to the files of the Quotidien du Medccin and of the Panorama du !vfCdecin, the two principal periodicals which report on matters of medical, political, and social interest to French physicians. The files of the Quotidien du Medccitl extend back to 1970, those of the Panorama du !vICdecin to 1974. I was also permitted unlimited access to the archives of the Concours Medical (perhaps the closest French equivalent to the American New England Journal if Medicine). Its numbers date from 1879. This source in particular provides invaluable information on the historical roots of French medical syndicalism which we will explore in chapter 4.

Introduction I 7 For the analysis of American health care politics, I have relied on interviews with and information from about fifteen employers and health care professionals-mainly from areas of California, Texas, and South Carolina-as well as interviews with group and government officials in Washington, D.C. Especially for the American case, I have used the rich secondary literature extensively. I have also interviewed officials in Japan, West Germany, Canada, and Britain for the fiscal imperative argument in chapter 10, as well as having consulted the secondary literature. Many individuals in each of these countries have contributed confidential information to this study, either through their answers to questions in interviews or through providing me with internal documents. Throughout this study I have treated their contributions anonymously.

PHYSICIANS' STRATEGIC POLITICAL AND MARKET POSITIONS

The first constant shared by France and the United States is that their respective medical professions were able to consolidate important political and market positions at the turn of the century. This historical power would later make some countervailing force essential to controlling health care expenditures. For most of the nineteenth century, physicians in both Europe and the United States enjoyed neither high incomes nor high status. Their market position was poor, thus they did not occupy a strategic political position and their political influence was consequently minimal. One reason for this was that medical technology was primitive and physicians were generally no more successful at treating illness and disease than witches, traveling medicine men, faith healers, and the like (cf. Rothstein, 1972; Starr, 1982; Bungener, 1984). Further, patients did not seek out physicians if they could not pay them. Medical incomes were consequently low. Although the objective demand for health care was higher than in the twentieth century (given sanitation conditions, for example), there was little subjective demand for health care. With the rise of industrialization and the advent of a large middle class, individuals could pay physicians for their services. Physicians' incomes consequently rose because the subjective demand for health care services increased (cf. also Hatzfeld, 1971). But even if able to pay, the sick will not patronize physicians if services are not better

8 / Introduction

than the witches, medicine men, and healers. An "interaction effects" model explains the rise of the orthodox medical profession and the consolidation of its control over health care. Both elements-many able to pay (a large or growing middle class) and a service worth buying (the technological and scientific advances of medicine)-were present before physicians' incomes and social prestige increased. From roughly 1890 to 1920 the orthodox medical profession in both Europe and the United States transformed itself from a mere competitor with other health care providers into a hegemonic force controlling most aspects of the health care universe: hospitals, research, teaching, pharmaceu ticals. Physicians' incomes rose dramatically again during the post-World War II period because the state in both Western Europe and the United States began to pay physicians to treat populations not previously able to pay, principally the poor and the aged. The state in Western Europe and large private insurers in the United States also paid for more health care for the middle and working classes (cf. Kervasdoue and Rodwin, 1981), resulting in increased medical incomes. Markets expanded and incomes rose also because a new wave of technological advances in diagnosis and treatment rendered previously untreatable illnesses treatable and previously incurable diseases curable. In both France and the United States during the nineteenth century the medical profession also expended great efforts to organize more successfully as a guild that could limit entry into the profession. As with any guild, upholding standards and protecting members were twin objectives. Of course, scientific and technological advance were indispensable to successful guild-organizing efforts by providing the objective basis for claims of expertise and the need to control quality. As Rothstein (1972) argued, the reorganization of the American Medical Association at the turn of the century was successful "not because physicians had changed, but because medicine had changed" (Rothstein, 1972:323). Dogmas and sectarianism were no longer tenable in medical practice because of the rise of science. Demonstrable scientific proof was the criterion of validity. Traditional medicine divided physicians; scientific medicine unified them. Thus in the twentieth century, physicians enjoyed high incomes because of high demand and low supply. The guild effect limited supply. Demand, we have seen, increased with the rise of a middle class, with the rise of the welfare state and-in the United States-with the advent of large private insurers, and with general technological advances. Physicians, of course, should have favored the rise of the wel-

Introduction / 9 fare state, for it increased subjective demand. Medical incomes in the United States, for example, rose most rapidly after the establishment of Medicare and Medicaid. But-to differing degrees, of coursephysicians in England, France, and particularly the United States opposed efforts to expand and generalize the availability of health care with national health services or national insurance schemes.

WELFARE STATE CRISIS AND HEALTH CARE SPENDING

A second constant shared by the French and American health care systems is the history of rising health care expenditures in the postwar period and the aggravation of this problem by the onset of general economic recession in the post-I973-74 period. The perception ofwelfare state fiscal crisis, in fact, was not new to the I970s. Economic pressures of funding extensive public health care programs were confronted by policymakers in France throughout the I950S (cf. Jamous, 1969) and the I960s (cf. Collins, 1969), even as the system was being made more comprehensive. French Social Security ran growing deficits starting in 1949, due almost entirely to increasing health care expenditures. Corrective measures were instituted starting in 1951. These included increased fiscal controls, stabilizing administrative costs, and eventually raising the contribution levels of both employers and employees to the health care regime (cf. Dumont, 1981:199-207). Economic pressures and ideological preferences led to a complex set of reforms, first in 1960 and then in 1967, reforms which both expanded coverage and attempted to rationalize administration and organization of health care to control costs. The same economic pressures and ideological preferences led to proposals for reform in West Germany in 1958 (cf. Safran, 1967) and in the I970S (cf. Stone, 1980). But the oil shocks of the I970S greatly exacerbated the problems associated with financing health care and made these difficulties more politically salient. General Economic Crisis Among other problems, welfare states suffer from the geographic redistribution of industrial production-or the working out of the product cycle (cf. Vernon, 1971; Kurth, 1979). Their traditional industrial power gave them the resources to expand welfare, but this preeminence-dependent upon such sectors as steel, textiles, shipbuilding, or

10 / Introduction high technology-has been overtaken by newly industrialized countries such as Taiwan, South Korea, or Singapore. The two oil shocks of the 1970S also led to increases in the cost of energy. By 1980, France, for example, had to finance over 55 billion FF per year in oil imports (Gourevitch, 1982:2). In contrast to the "growth decades" of the 1950S and 1960s, economic crisis from roughly 1973 through most of the 1980s brought on a shrinking of both the state's resources and personal disposable incomes-not absolutely but relatively. For example, in the United States the rate of annual real growth in GOP in the 1951-74 period averaged over 3.5 percent with an inflation rate that averaged about 3 percent per year. In the period 1974-80, however, the average rate of annual real growth fell to just under zero percent with almost 12 percent inflation annually. In France the rate of annual real growth in GOP from 195 I to 1974 averaged over 6 percent with an average annual inflation rate of about 5 percent. From 1974 to 1980, the French rate of annual real growth in GOP fell to just under I percent with an almost 14 percent annual inflation rate (cf. Alt and Chrystal, 1983:56). Little growth, high inflation, and ineffective economic policies in Europe constituted a syndrome that was widely characterized as "Eurosclerosis." The same combination plagued the Nixon, Ford, and Carter administrations from 1974 to 1980 and provided a setting amenable to experimentation with supply-side economics during the early years of the Reagan administration. Health Care Cost Explosion Despite economic crisis, the cost of health care and physicians' fees continued to rise throughout this period and did so even more rapidly than before. Estimations vary, cross-national statistics are not always strictly comparable, and, in some instances, data are not available. Other data are difficult to evaluate. Nevertheless, time series and crosssectional statistical information can give a general view of similarities and differences in health care spending. Table 1. I shows that for each of the countries in the OECO (Organization of Economic Cooperation and Development) Group of Seven, total health expenditures as a percentage of GOP has dramatically risen between 1960 and 1987. The United States spent 5.2 percent of its GOP on health care in 1960. It spent 11.2 percent in 1987, the largest percentage of any country in the sample. France spent 4.2 percent of GOP on health care in 1960, increasing to 8.6 percent in 1985. Of the

Introduction / Table

United States Canada France West Germany Great Britain Italy Japan Source:

CREDES,

1. 1.

II

Total Health Expenditures as Percentage of GDP, 1960-1987 1960

1965

1970

1975

1980

1985

1987

5.2 5.5 4.2 4.7 3.9 3.6 3.0

6.0 6.0 5.2 5.1 4.1 4.3 4.5

7.4 7.1 5.6 5.5 4.5 5.2 4.6

8.4 7.2 6.7 7.8 5.5 6.1 5.6

9.2 7.4 7.4 7.9 5.8 6.7 6.6

10.6 8.5 8.4 8.2 6.0 6.9 6.7

11.2 8.8 8.6 8.1 6.0 7.2 6.9

Eco-Sante (Paris, 1989).

sample, in 1987 Britain spent the least on health care, only 6.0 percent of GDP. Other "low spenders" were Japan with 6.9 percent and Italy with 7.2 percent. Between the high and low spenders was the group of three national health insurance systems: France (8.6 percent), Canada (8.8 percent), and West Germany (8.1 percent). The problem of escalating health costs has been a general one, outstripping the growth rates of all GDPS and the growth rates of population. A study by the Centre de recherches pour l'etude et l'observation des conditions de vie (CREDOC, 1975), for example, measured the evolution of French medical consumption from 1950 to 1974 in constant francs. In 24 years, consumption increased more than five-and-a-half-fold from 6.708 billion FF to 37.369 billion FF (constant). In the same period the French population increased 20 percent. Figure 1.1 compares the postwar evolution of health expenditures in France to that of the United States. Expenditures in both countries have risen at roughly the same rate, although France started lower and has been able to stay lower throughout the period. From 1980 to 1987 it appears that the annual rate of growth has slowed in France a bit more than in the United States. The pressures of two oil shocks (in 1973-74 and 1979) and economic recession did not cause but clearly exacerbated the financial disequilibrium of public health care programs whose expenditures were already independently increasing. From the general aging of populations to the costs of explosive development of high technology-from simple x-rays, now widespread, to chemotherapy, kidney dialysis, artificial hearts, and a host of other miracle machines and processes-the cost of health care during the period increased at rates significantly greater

12 / Introduction Figure 1.1.

Growth of French and American Health Expenditures

12

/'

11

10

J

9

./

8

~

/V-'

7

/

6

5 United States 4

France

~ ~ v---

)

f'v

.---K

~

/"

/'

/" .--/"

V

3

2

1955

Source:

1960 CREDES,

1965

Bco-Sante (Paris:

1970

1975

1980

1985

1990

1989).

than GDP growth rates (see table I.2; a fuller comparison of French and American health care expenditures from 1900 to 1981 is shown in table 1.3). Further, the physical plant expansion of the 1900S and 1970s, chiefly in hospital facilities, and their evolution in type-from wards to private rooms, for example-led to increased operating costs, in a secular trend over and above increases in personnel salaries. During the postwar period it was hospital costs that rose most rapidly as a proportion of total health care expenditures: from I. I percent of GDP in France in 1950 to 3.5 percent in 1977 or from 39 to 50 percent of total expenditures. Once built, hospitals must be operated. Overbuilding and the resulting surplus hospital capacity aggravated the fiscal problem. Moreover, in France, for example, hospital budgets were calculated by the Ministry of Health according to per bed/per day occupancy, thus eliminating any incentive for hospital directors and physicians to reduce patient admissions or length of stay. The practice was not unique. American hospitals, too, operated on a cost-plus or retrospective reim-

Introduction / I3 Table

I.2.

Social Welfare Expenditures in

Social Welfare Expenditures (%

GOP)

GECD

Annual rate of Real GOP Growth (%)

Countries, I960-I98I Annual Rate of Growth of Social Welfare Expenditures, Corrected for Inflation (%)

1960

1981

1960-75

1975-81

1960-75

1975-81

Canada France West Germany Italy Japan Great Britain United States

12.1 13.4' 20.5 16.8 8.0 13.9 10.9

21.5 29.5 31.5 29.1 17.5 23.7 20.8

5.1 5.0 3.8 4.6 8.6 2.6 3.4

3.3 2.8 3.0 3.2 4.7 1.0 3.2

9.3 7.3' 7.0 7.7 12.8 5.9 8.0

3.1 6.2 2.4 5.1 8.4 1.8 3.2

Average of the Seven

13.7

24.8

4.7

3.0

8.3

4.3

10.2 17.9 17.4

5.2 4.5 4.5 3.7 4.5 6.8 4.3 4.5 4.0 4.3 4.0 3.4

2.4 2.9 2.2b 2.2 2.9 3.5 3.5 2.0 0.4 4.1 1.0

9.6 6.7 9.3

1.7

7.5 8.4 9.1 10.4 5.5 10.1 7.9 7.6

2.4 5.0 7.9" 5.4 4.8 9.4 b 7.1 1.6 3.5 4.6 4.7 2.7'

4.6

2.6

8.3

4.7

Australia Austria Belgium Denmark Finland Greece Ireland Netherlands New Zealand Norway Sweden Switzerland

15.4 8.5 11.7 16.2 13.0 11.7 15.4 7.7

18.8 27.7 37.6b 33.3' 25.9 13.4b 28.4 36.1 19.6 27.1 33.4 14.9'

averaged

13.4

25.8

OECD

c

Source: OECD, Statistiques de depenses sociales. a. Excluding education expenditures.

h. 1980. c. 1979. d. Non-weighted averages.

bursemcnt basis until the gradual introduction of prospective payment systems during the I980s. Altman and Eichenholz's description of the problem held for both

14 / Introduction

Table I.3. French and American Health Care Expenditures, 1960-19 81 France (in billions offrancs)

1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981

United States (in billions of dollars)

Current Prices

1970

Price Index

Price Index

(1970= 100)

Current Prices

1970

Prices

Prices

(1970= 100)

7.4 9.0 11.0 13.3 15.7 17.4 19.8 22.1 23.3 28.9 34.0 39.0 44.9 51.5 60.4 79.9 94.8 105.8 125.3 146.5 169.9 200.4

11.7 14.0 16.2 18.2 20.6 22.1 24.2 26.2 26.4 30.2 34.0 37.3 40.7 44.4 47.2 55.1 58.9 61.2 66.3 71.3 74.8 79.7

0.6298 0.6439 0.6792 0.7331 0.7662 0.7870 0.8180 0.8423 0.8785 0.9572 1.0000 1.0467 1.1020 1.1610 1.2803 1.4489 1.6080 1.7300 1.8906 2.0537 2.2727 2.5150

6.6 7.4 8.2 9.1 9.9 10.8 13.6 19.0 22.1 24.9 27.8 31.7 35.4 39.3 47.1 56.2 62.9 70.1 79.9 90.6 105.4 122.5

9.5 10.4 11.3 12.3 13.1 14.0 16.9 22.2 24.7 26.2 27.8 30.1 32.0 34.2 38.2 41.5 43.2 44.1 46.1 48.0 50.2 52.0

0.6950 0.7130 0.7280 0.7390 0.7530 0.7730 0.8070 0.8540 0.8950 0.9510 1.0000 1.0530 1.1050 1.1480 1.2320 1.3540 1.4560 1.5880 1.7250 1.8860 2.0990 2.3580

Sources: Les comptes de la sante, INSEE; National Income and Product Accounts, United States; Statistiques de depenses sociaies, OEeD.

France and the United States. "The fact that most hospital bills are now paid on a cost-plus basis has generated a 'blank check' environment for the financing of hospital care" (1976:7-9): The assurance of adequate reimbursement for services led to an essentially unconstrained increase in the amount of equipment purchased and the number of hospitals, beds, and an increase in average bed size. These increases often occurred without regard to the usual analytical criteria of efficiency, need, or likely utilization. Such assurance also led to increases

Introduction / 15 in the number of hospitals that expanded various kinds of complex services .... Much of this expansion was in the physical plant itself, where the relatively small proportion of cash required allowed major capital expansion with the assurance that third-party payments would generate adequate revenues to meet mortgage obligations (1976:19). The Role of Technological Progress The technological progress of medicine depicted by Bernard at the opening of this chapter is important to explanations of fiscal crisis in health care during the postwar period. 2 Michel (1980: II 3- 14) is suggestive: The cost of a day of hospitalization in certain advanced medical services in France, such as reanimation, cardiovascular surgery, or neo-natal care, was more than 2,000 FF per day in 1980 ($462 at exchange rates of the period). By 1970 the cost of open heart surgery (over 15,000 performed per year in France by 1980) was equal to the maximum individual contribution to the Securite Sociale for seven years. By 1980 a kidney transplant in the United States cost $15,000 (or 65,000 FF). In 1980, the cost of a heart transplant was estimated at 500,000 FF (or more than $II5,000). By 1975 more than 4,000 people in France subject to chronic kidney failure were being treated by hemodialysis either in special centers or at home. The cost was estimated at that time at 550 million FF ($127 million). Much of the new technology is dependent on expensive machines and exotic techniques such as scanners, lasers, linear accelerators, echographs, or microsurgery, which cannot be produced to the same economies of scale as traditional industrial goods or services. Much of it is also dependent on labor-intensive, highly skilled execution, as with laboratory analysis or chemotherapy. Each medical innovation has three effects. First, it increases the pool of eligible patients. As Dutton (1987:14) argues, successful technologies add geometrically to overall expenditures because they create new products and services that reinforce the inflationary spiral of medical costs. Heart patients now undergo expensive open heart surgery and receive artificial valves and pacemakers. These patients used to die. Dutton estimated that between 33 and 75 percent of the increase in the cost of hospital care was due to new medical technologies. Second, much of the new technology and its enormous investments apply more and more to disease which afflicts only a small percentage of the population. The first great advances in health care were by contrast inexpensive and benefited many more people, such as im-

16 / Introduction

provements in public sanitation or the discovery of antibiotics. The economic character of current advances is reflected in the estimate that only four percent of the sick cause 50 percent of direct health care expenditures and that ten percent of the sick cause 70 percent of expenditures. Third, more and better technology has expanded medicine's ability to fix or comfort the sick. But each technology also carries with it powerful potential to do harm (Dutton, 1987:15). New drugs, for example, cause adverse medical reactions (AMRS) in many. Some of these patients die. Other drugs, like tranquilizers, lead to dependency with alarming ease. Some medical therapies carry with them the risk of serious side effects. And, paradoxically, "keeping people alive longer has led to higher rates of disability in the population, rising medical care costs, and an increasing prevalence of chronic conditions and hereditary genetic abnormalities" (Dutton, 1987:15). Technological progress also makes physicians more aggressive than they used to be. They use advanced diagnostic and surgical techniques of all types incessantly. One test may be 90 percent certain in its diagnosis; a second test may eliminate nine percent of the remaining uncertainty. Physicians prefer adding the second test to the first, even if the second one is just as expensive or more expensive than the first. Similarly, second opinions are common, even though two physicians must be paid instead of one. In the United States, the increase in second opinions and in the numbers of tests used to reach a diagnosis is due only partially to the increase in malpractice suits. It is also due to the improvement in the quantity and quality of reasonably effective tests and to the healing psychology resulting from modern medical advances, replacing resignation in many cases. The problem is complex for the three causes interact. Modern medical advances, resting on diagnostic, treatment, and drug improvements, give an aggressive healing psychology not only to physicians but to patients. This in turn leads to a belief that physicians, rooted in science, should do no wrong. Malpractice suits punish mistakes. Hence more tests and more second, even third opinions, give rise to a syndrome known as "defensive medicine" (cf. Copeland and Meier, 1986). The cycle reinforces itself with each advance in technique and public awareness. As always the distinction between necessary prudence in tests, drugs, and treatment and excessive caution is difficult to draw, for while medicine may be more of a science than political science, it is a much more primitive science than physics or chemistry. In many ways, medicine is still an art, one that combines goodwill with alchemy to try and better the lot of the sick.

Introduction / 17 Nevertheless, some new technologies clearly reduce costs and bring great new benefits to many people. Modern drugs, such as antibiotics, are a prominent example. Recently surgery has turned toward new less-invasive procedures which minimize cutting and thus shorten or eliminate convalescence. But many advances must pass through crude -and expensive-development periods before achieving a refinement in effectiveness, in both results and cost. The artificial heart is one example. How to predict and finance instances of future effectiveness in an era of extreme cost consciousness is uncertain and difficult. Furthermore, for every dollar or franc spent on the artificial heart, one less dollar or franc is spent on the prevention of heart disease. Further, every innovation is coupled with unintended effects. Many new techniques, for example, have significantly reduced the need for surgeries. Lithotripsy, which dissolves kidney stones with sound waves, eliminates the need for most surgical interventions. New drugs, like Glaxo's Zantac, treat ulcers which used to require an operation on the stomach or upper intestines. There is also some hope that new drugs will be able to open clogged heart arteries that currently require coronary bypass surgery, which now accounts for 250,000 operations per year (New York Times, November 7, 1989). These innovations are to be welcomed, of course, but they also imply that there is a glut of surgeons which in turn brings about its own problems. In the United States the number of surgeons grew from 58,000 in 1970 to 106,000 in 1985, almost double. But the number of operations has remained constant at about 16 million since 1979. From 1982 to 1985, the number of operations per surgeon fell by 25 percent. The negative consequences of this evolution are that many surgeons, especially those specializing in general surgery, are not doing enough operations to keep their skills up. Surgeons also multiply the number of minor and marginal surgical procedures to make up for lost income. How can a particular health care system deal with such evolutions?

MEDICINE AND ECONOMIC MARKETS

These observations suggest that the medical market-no matter what its organization-is difficult to compare to a "normal" free market, which in turn suggests important limits to possible reforms. The particularities of the medical market-which render that market incapable of regulating itself-make external regulation both necessary and difficult. Because of its character, physicians in both France and the United States occupy a strategic position in the medical market. This

18 / Introduction

position enables them-some would say induces them-to exert upward pressures on expenditures. By the same token the medical market makes controls difficult. Unlike the free market, regulation must be imposed. Indeed, medical markets, because of their character, invite regulation, indeed demand it. A central question in making health policy is who, if anyone, will impose this regulation, and if so, how it will be imposed. In this book we will see that France and the United States differ along this important dimension. In theory, a free market is one which is organized according to the free flows of supply and demand. Supply increases or decreases in response to demand; prices rise and fall according to the momentary equilibrium between supply and demand. Prices cannot in theory remain "too high." When too much demand chases too little supply, new producers enter the market. Their competition-nothing more than an increase in supply-lowers prices overall. When too many goods are offered for too little demand, producers lose money and withdraw from the market, decreasing supply. Prices rise. The global result of a free market is in theory an efficient equilibrium between supply, demand, and prices which serves the interests of both producers and consumers. But the medical market departs from essential characteristics of the free market model. A brief sketch will demonstrate how the medical market is susceptible to runaway costs which in turn invite the imposition of external regulation. I. The principal good consumed in the medical market is morally tangible but monetarily intangible: good health versus bad, living versus dying. No common measure of equilibrium or of efficiency in health is beyond ambiguity, as are prices. Demand, therefore, cannot be easily measured in terms of consumer preferences. Preferring good health and living to bad health and dying is in no way commensurate to preferring a durable good, such as a television set, or a common service, such as a restaurant meal. 2. Demand is inelastic. This condition holds in the restricted sense that one does not choose-in the short term (health habits aside)-to be healthy rather than sick as long as cures or treatment exist, as one may choose to forgo a television set or a restaurant meal. 3. In the medical market, primary producers (physicians) constitute an oligopoly. They alone possess the technical knowledge necessary to "produce," that is, to practice medicine. They also control access to the market place, through medical schools and licensing systems. Further, the medical profession has always been characterized by important homogenizing forces-education, ethics, the common

Introduction / 19 mission of healing-that are qualitatively different from the common mission of capitalists, that is, to make money. 4. Consumers, even if ideal competition could exist between producers (physicians), lack the information and expertise to judge the prices and quality of health services (cf. Altman and Eichenholz, 1976:12). Consumers find it, therefore, difficult to evaluate the product sold or to compare it to other products on the market. Price-quality relationships and estimates of marginal utility in health services are exceedingly complex, if not impossible to discern. The worth of a restaurant meal, fixed at $65, and the worth of double-bypass coronary surgery, fixed at $35,000, have little in common. 5. Only minimum "industrial concentration" is possible in health care, thus economies of scale are limited. Research can be carried on in large centers, like research universities or drug companies, and distribution of these products poses no inherent difficulty. But the practice of medicine is characterized by a decentralization of both production and consumption. 6. In the medical market the consumer (patient) is not the master of consumer decisions. Rather consumer decisions are made by the producer or supplier (physician): which drugs and how many to consume, which tests and how many to perform, which treatments to follow, length of hospital stays, nature and number of surgical operations. Thus the costs to the patient are not directly determined by the patient, for producers monopolize consumer decisions in medicine. 7. In the modern medical market characterized by third-party payers, there is little sensitivity of consumers to price nor of payers to consumption. Consider that while the actual consumer does not pay, neither does the actual payer consume. The consumer end of the consumer-producer relationship is split. Thus the price-quality relationship is broken. The consumer has no incentive to be sensitive to price. The payer has at best imperfect means by which to verify quality. 3 Neither do producers have any ethical incentive to watch costs, for the professional code obliges them to do all in their power and to neglect no avenue in treating patients. If anything, ethics incite physicians to spend more money. 8. The sick support only a small part of the cost of their own health care-and that, indirectly. The socialization of risk, whether through the state or through private insurers, cushions the minority, who are the consumers of the majority of health care expenditures, from the financial impact of their treatment. The majority of people who fund that minority is so numerous that they feel very little impact.

20

I Introduction

9. Large segments of the industry (hospitals and medical schools, for example) are nonprofit. Their responses to financial incentives differ from those of profit-making firms. Nonprofit firms may place more emphasis on maximizing capital or services rather than maximizing retained earnings or minimizing cost per unit of output (Altman and Eichenholz, 1976:II).4 Evans (1984:24-26) is right to argue that all of these factors can be reduced to three basic intrinsic characteristics of medical markets: uncertainty of illness incidence, external effects in consumption, and asymmetry of information between provider and user. This is the fundamental triad from which all other characteristics can be derived, either as variants or as social responses to them. For example, "licensure responds to asymmetry, public subsidy or supply to externalities, insurance to uncertainty" (Evans, 1984:26). The character of medical markets tends to keep costs high, aggravating fiscal problems, for there is no self-regulating mechanism for the medical market equivalent to competition for the "free" market. Physicians' influence over this system is structurally great. Further, the decentralization of medicine and the ethical nature of health make it difficult to (I) locate culprits of waste and (2) sanction them effectively. In other words, once market laws cannot regulate a market, then external regulation must be imposed. Medical markets are by nature not self-regulating. There is no invisible hand.

COST AND QUALITY OF HEAL TH CARE

Worse than the fact that health is expensive and that markets for health are extremely difficult to regulate is the other fact that there is no systematic demonstrable relationship between how much one spends for health care and the quality of that care. While, of course, this claim does not hold for some specific patients, as we will see below, it certainly does hold for aggregate spending on health. While the United States spends more per capita than any other country, indicators of health status do not rank the United States at the top-far from it (cf. table 1.4). While the health expenditures rankings of the OEeD Group of Seven place Canada second behind the United States, it should be noted that the distance between Canada and the United States is considerably larger than the rank order indicates. The United States spent 11.2 percent of its GDP on health care in 1987. Canada spent only 8.8 percent,

Introduction /

2I

Table 1.4. Total Health Expenditures and Health Status, 19 87 Total Health Expenditures/ Canada France Germany Italy Japan Great Britain United States

GDP

Rank

8.8 8.6 8.1 7.2 6.9 6.0 11.2

2 3 4 5 6 7

Health Status Infant Life Expectandeath rates' Rank cy at Birth Rank 9.10 9.70 9.75 15.45 6.10 10.80 11.50

2 3 4 7 1 5 6

75.50 75.00 74.70 74.35 77.75 74.30 74.65

2 3 4 6 1 7 5

Sources: OECD, Financill,R and Deliverillg Health Care (Paris: aECD, 1987), pp. 33-36, for indicators of health status; and CREDES, Ew-Sante (Paris, 19R9), for health expenditures. a. Deaths per 1,000 live births.

followed closely by France with 8.6 percent and West Germany with 8. I percent. It is reasonable to conjecture that national health insurance schemes of the three countries may be an important factor in leading to similar expenditure levels, much higher than the National Health Service in Britain (6.0 percent of GDP) and much lower than the more than I I percent of the largely free enterprise system in the United States. Likewise, some caution is advised in evaluating the cross-national rankings of health status. The most widely used global measures concentrate on death rates, life expectancy, morbidity rates, and various dysfunctions. These measures do not always yield a coherent picture of comprehensive health status. For example, increased life expectancy may also lead to increased dysfunction, in some countries. Nevertheless, the indicators that I have chosen to display in table 1.4 provide a rough view of health status that is approximately comparable across the Group of Seven. First, I have chosen average infant mortality rates across both sexes per 1,000 live births. According to this measure, the United States does quite poorly, second only to Italy with I 1.5 infant deaths per 1,000 live births. France does much better, with 9.7 infant deaths per 1,000 live births. In terms of health expenditures, Japan spends not much more than Britain (6.9 percent of GGP compared to 6.0), much, much less than the United States, and somewhat less than France. Here is where factors such as diet undoubtedly enter in. Second, I have chosen average life expectancy across sexes. For this

22 /

Introduction

measure, Japan docs significantly better than any other member of the Group of Seven with an average life expectancy of 77.75 years. The other six countries are grouped closely together around 74 and 75 years, although the United States docs better only than Great Britain and Italy. For life expectancy there is clearly little relationship between how long a country's citizens live and how much the country spends on health care. o Lewis (1974) has posited three cost quality curves: 1. For the linear and positive curve, the better the quality, the higher the cost. This curve often describes complex and infrequent medical illnesses, which may nevertheless add up to large expenses, proportionally, in the aggregate. 2. In the scattergram, there is no association between costs and quality. This curve applies to many self-correcting illnesses, for example, colds and the flu. 3. With the asymptotic curve it is possible to improve care with more expenditures, although the gains are incremental, often negligible. Medical technology also increases costs insofar as the new technology is little more than incremental refinement of previous techniques. But some technology may in the end reduce costs, such as laser surgery. I noted both of these points in an earlier section. The problem, however, is how to decide if technology spending is worthwhile in the many immense gray areas, such as artificial heart development. Opponents point to the obvious, its outlandish cost with little immediate return. Proponents argue that a long-term horizon justifies the investment. In thirty years, small, cheap artificial hearts could be as widespread and cost-effective as pacemakers today. There is no evidence by which to refute or support either side. Both arguments are based on conjecture. As for physicians, four hypotheses may be put forth to explain their cost behavior (that is, their role in determining costs). I. Costs are positively correlated with quality of care. Physicians who frequently order laboratory procedures are more thorough and conscientious. (This hypothesis is also related to the phenomenon of "defensive care.") 2. Medical costs are negatively correlated with quality of care. High users are less competent and attempt to compensate for clinical deficiencies by excessive reliance on tests and procedures. Low users have greater clinical competence and are more judicious in lab use. 3. Medical costs are unrelated to clinical competence or quality. Behavior is related to individual personality characteristics such as compulsiveness or to the treatment patterns (or the clinical "culture") of local environments. There is no relation to the quality of care or phyI

Introduction / 23 slC1an competence. 4. Finally, according to Lewis (I974:809), "One achieves a relatively high degree of quality of care (say 90 to 95 percent of total excellence) with a relatively small investment, and then the curve becomes asymptotic. It is possible in these cases to improve care with more expenditures, although the marginal gains from such continued investments may be relatively small." Although each hypothesis undoubtedly describes some observable behavior. the most adequate overall explanations arc probably a mix of three and four, although the literature is mixed (cf. Cards et al., I980). Hypothesis three suggests to what degree medicine is still an art and not a science. Hypothesis four suggests that psychologically, given that the mission of medicine is health and this mission is impregnated with powerful ethical considerations, it is most difficult to settle upon a "rational" efficiency criteria in medical practice. This type of research is complicated by the host of factors that inft.uences physicians in ordering all types of medical services: Belief that more services improve quality; patient demand; "defensive medicine" in the face of malpractice fears (cf. Copeland and Meier, 1986); fiscal incentives; medical practice variables (group versus solo; prepayment/fee for service; medical specialty); the inculcation of healing values in medical school; knowledge of costs of medical services; and participation in medical teaching (Carels et al., I98o:32). I have previously pointed to the fact that often physicians prefer additional tests and consultations to resolve relatively small increments of doubt in their diagnosis. In the United States, the rise of malpractice suits has played a partial, but not complete, role in this. This focal point of the physician's spending patterns is an excellent illustration of how difficult it is to correlate cost with quality in health care. The ambiguities are demonstrated compellingly in Carels et al. 's study of detection of colon cancer (198o:I36-4I). In that study CareIs et al. considered four primary tests for detecting asymptomatic colon cancer, the occult blood (cm), the sigmoidoscopy (SIG), the digital examination (DE) and the colonoscopy (COL). In the example, the OB costs $I and finds 75 percent of all colonic CAS. The DE costs $2 and finds 90 percent of the IO percent of colonic CAS that occur in the rectum. The SIG costs $20 and finds all of the 60 percent of colonic CAS that occur in the rectosigmoid. (There is also a small risk associated with the sigmoidoscopy:) The COL costs $250 and finds all CAS that can be found. (This procedure also carries risks.) Factoring in the number of false positives for each test, CareIs et al. found that marginal cost of the OB per CA found was $3,200 and

24 / Introduction

per year of life saved $800. The marginal cost of the on and SIC performed together was $12,946 per CA found and $3,236 per year oflife saved. The marginal cost of COL was $206,580 per CA found and $51,645 per year oflife saved. As they rightly remark, "How much is too much to spend per year oflife saved?" (1980:141). One is reduced to picking a number, a dollar or franc amount, that then serves as a cutoff point. But these final, inevitable choices are, in the end, arbitrary decisions taken in a universe of finite resources and infinite demands. Of course, there are many complex variations to this story of cost and quality. Sanitation, diet, exercise, and other health habits (e.g., smoking or alcoholism) clearly play a role in health status and often have a greater payoff per dollar spent than the formal supply of medical services for the sick and dying. The money for one open-heart bypass procedure could have gone to operating a prenatal clinic that would have treated 5,000 expectant mothers annually. Or the income saved by a queuing system for non-emergency surgery, as in Britain, could be used to finance primary care for roo percent of the population. As long as no society is willing to spend a literally unlimited amount of its resources on health care, then rationing of care will occur in order to contain those expenditures, even though those expenditures arc almost never as contained as much as payers would like. Some rationing is deliberate and considered, such as the queuing system of British hospitals. Other rationing occurs by default, such as that manifested by the large numbers of lower-income Americans who have no health coverage at all. Whether deliberate or by default, unfortunately, there is no formula for the best rationing system because there is no systematic relationship-positive or negative-between the quality of care and how much it costs. It is this highly uncertain relationship of cost to quality in health care that continues to provide ammunition to those who wish to attack the role of physicians in solely determining the character and thus the cost of care.

PLAN OF THE BOOK

We have seen thus far that the French and American cases are similar in important respects. Two highly complex, advanced, democratic countries see to it that a strong, orthodox medical corps assures the smooth functioning of an advanced, highly technological health care system. Both systems have experienced an explosive and continuing

Introduction / 25 Table

1. 5.

Physician Incomes I 970/ I 98 I

Relative to Average Employee Income (of 1.00)

France United States

Absolute Amount (US$ GDP purchasing price parities)

1970

1981

1970

1981

4.80 5.40

3.30 (1979) 5.10

26,600 41,800

46,800 (1979) 93,000

Source: OEeD, Fillallcillg alld Deliverillg Health Care (Paris, 1987), p. 76.

rise in health expenditures. These expenditures have strained the payers' ability to pay. Medical markets in both countries are hard to control, necessitating external regulation in the face of the fiscal problem. But both countries also allow groups like physicians to organize and press their claims upon the political system. Physicians have not always been allies to those responsible for financing health care. But France and the United States also differ in important respects. This book seeks to understand the causes of these differences. Why is the overall cost of health care in the United States almost two-and-a-half percentage points of GDP more than in France? Why is the French system more public than the American and what are the consequences of this imbalance between public and private? Why has the medical profession in the United States been more successful at resisting reforms than its French counterpart and how does this affect the delivery of health care? Why do physicians in the United States make double what their equally skilled and talented French colleagues make (cf. table 1.5)? Why do American physicians make five times more than the average worker while their French counterparts make only little more than three times more? Do these differences reveal any underlying reasons for the broader differences in health care system and the physician's role in it? Because of high and increasing costs, because of their market peculiarities, and because the cost of care bears little relationship to quality, medical markets must, unlike the theoretical free market, be regulated. What authority will regulate them? We will sec in the course of this book that especially in the United States would-be regulators of medical markets (the government and private insurers) are so dispersed that imposing external regulation is both difficult and takes a very long time. Hence the advantage of the French state as an

26 / Introduction

external regulator of medicine: its concentration of tactical advantages in making policy and the supporting tradition of the strong state enable it, particularly with the advent of the Fifth Republic, to impose external regulation on a market which could never regulate itself. But while medical markets tend to high and (with technological progress) increasing expenditures, they also limit in important ways the possibilities for health care reform. They do so by enabling physicians to defuse and disperse political pressures for economic change. They do this by assigning physicians an extraordinarily strategic position in each medical market. Organized medicine has traditionally been motivated by a perspective of autonomy of medicine from economics. It has been suspicious of efforts to control expenditures. It has argued that its economic sector is, precisely, special. "Health has no cost. "6 Hence a strong state-with centralized control (although not necessarily direct control, but simply the potential for it and assurance of the last word)-may be necessary to focus decisionmaking and serve as the countervailing force to the advantages that modern medical markets give physicians. Failing strong public control as the countervailing force, other institutions will have to come to the fore to impose the necessary regulation on medical markets and physicians. In the United States, we will see, these come from the private sector-the insurers and employers that pay for so much of the care. In chapters 2, 3, and 4, I will layout the principal independent variables of this study. Chapter 2 examines the character of the French state in health care-its structures, processes, and traditions-and how it influences the making of policy and relations with organized groups. I will refer to this variable as the French state's "autonomy." The French and American states differ in their role and influence on sectoral politics. The French state possesses tactical advantages which enable it, and under certain conditions the political party holding power, to pursue more specific goals in structuring the role of interest groups and to pursue those goals more effectively. In chapter 3 I will argue that the American state affects policymaking and relations with groups like organized medicine differently because its structures are fragmented, its processes are permeable, and its traditions abet the groups' interests rather than those of the state. In other words, in health care high state autonomy does not obtain in the United States. The weaker American state does not possess tactical advantages that give it the ability to dictate inducements and enforce constraints on the play of politics, although it does seek help from interest groups. In the American system the judiciary and Congress provide alternative arenas for policymaking which open the process

Introduction / 27 and reduce the state's effectiveness. Even incremental policy making is often unsuccessful. Compared to France, impetus for and enforcement of change come more from the private sector. In chapter 4 I will explore this study's second independent variable, organizational cohesion and mobilization in the groups' pursuit of their political interests. I will argue that one of the most important differences in the character of organized medicine in the two countries lies in the French profession's tendency to organizational particularism, or fragmentation, which weakens it in the face of a strong and determined state. By contrast, the American medical profession does a betterbut not perfect-job of preserving its unity and is more successful at exploiting opportunities presented to it by an open, fragmented, and dispersed policymaking process. In chapters 5 and 6 I will examine policy issues in France, concentrating on reforms implemented by recent governments, both socialist and conservative, and the resistance of the medical corps to these reforms. In chapter 7 I will examine policy issues in the United States, first addressing recent initiatives by the federal government and then exploring the ways that substantial policymaking in American health care takes place in an uncoordinated, decentralized private sector. Physicians have been finding success harder to come by in both the public and the private policy arenas, one of the major conclusions of this book. Chapter 8 will characterize the patterns of health care policymaking in France and the United States, and chapter 9 will specify the consequences of these processes on the political activities of organized medicine in both countries. Chapter 10 will then more fully develop the argument that curbing the influence of organized medicine-capping physicians' incomes and reducing their clinical autonomy-has become more and more essential to providing and financing extensive, adequate health coverage. In France, the public authorities have proven most successful at this task. In the United States the public authorities are much weaker. The American private sector, however, has risen to the imperative and implemented many changes in the health care system that have curbed organized medicine's influence. I will then argue that forces in all advanced, complex health systems are pushinginevitably-to curb physician's traditional prerogatives. This is the fiscal imperative in health care. Politically, organized medicine in some countries may be more successful at delaying these developments than counterparts in other countries, but in no country will physicians avoid these developments forever. What is clear from this study is that substantial change occurs in

28 / Introduction

both France and the United States in the face of economic challenges to financing the system. The traditional prerogatives of a powerful and strategic interest-physicians-have thereby been diminished. However, the change occurs more comprehensively and more rapidly in France than it does in the United States, perhaps one of the very important differences between public and private sector reform. The interesting paradox is that in the end results seem to converge. Throughout the course of this study we will see that in both countries the political influence of organized medicine has diminished. But equally important in this paradox is the difference: While results may converge, we will also see that their acceleration or delay differs significantly. Further, the character of change differs: Change in France is more comprehensive in scope and relatively speedy in implementation; too, it leads often to direct action, sometimes attended by violence. Change in the United States is more often characterized by the limitations of incrementalism. Seldom does direct action occur, much less violence arise. Finally, we will also consider whether state-centered change in France is more lasting while society-centered change in the United States is more fleeting, before turning to see how the conclusions which come out of the French-American comparison hold up to data from other cases.

2.

Unity and Fragmentation of the French State

We have seen that economic pressures on those who pay for health care came from general economic crisis, the progress of medical technology, the peculiarities of modern medical markets, and the lack of a clear relationship between cost and quality in health care. These economic pressures have brought on in turn political pressures on physicians. These pressures, we will see, have not ceased to curb their organized political power and their clinical autonomy. In France these pressures have come from the state because it is the state that pays for the vast majority of health care through a generalized national health insurance system which now covers more than 98 percent of the population. To better understand the character of these state pressures on organized medicine in France, this chapter examines two contrasting views of state authority in France and reopens the question of "strong" versus "weak" states. I will argue that in health care the French state is characterized by strong, relatively autonomous structures. The whole argument will suggest that in France-at least in health carethe state's structures are homogeneous and operate according to clearly defined agendas. They also benefit from clear, effective policy instruments which give them a certain number of tactical advantages against actors from civil society, especially physicians. State autonomy in France and the lack of it in the United States constitute the first independent variable of this study in explaining the differing success of organized medicine in resisting reforms that reduce its influence and curb its own autonomy in clinical practice. 1 The traditional strong state view, dating in France at least from Colbert and made intellectually congenial by Rousseau, takes the state as the sole embodiment of the public interest with commensurate powers against political and social manifestations of private interests. This view stresses the unity of the state. An opposing view emphasizes that, whatever the theory of the state, the state bureaucracy is in fact so fragmented, embodying so many conflicting interests, that strong state power is a fiction. I will juxtapose these two views of state power and authority and then, addressing the French case, turn to a way of

30 / Unity and Fragmentation of the French State

reconciling them which accords sufficient importance to the fact that "strong" states such as the French can indeed do things that "weak" states cannot, but that, equally, there are important limits to strong state power. We will see that one of the most important of these limits is the French state's vulnerability to direct action and other extreme forms of protest, that is, exit from normal politics, a point to be further elaborated in chapter 10. In this chapter I will argue that it is useful to conceive of state authority and structures in terms of "tactical advantages" that states may have at their disposal in relations with civil society. State traditions structure over time the tactical advantages states may have. Strong state structures and the ensuing tactical advantages enable the state to shape politics by employing more effectively policy instruments to induce and constrain political behavior and policy outcomes. The state's tactical advantages influence what interest groups, such as medical associations, do politically and how effective they are. Thus, the French state possesses tactical advantages which enable it to structure the role interest groups play. The "weaker" American state, on the other hand, does not possess tactical advantages that give it a comparable capacity to dictate inducements and enforce constraints on politics. The presence or absence of tactical advantages gives degrees of autonomy to the state's structures and to its officials-or withholds autonomy from them.

ROUSSEAU AND THE UNITARY STATE

"If the general will is to be able to express itself, it is essential that there should be no partial society within the State and that each citizen should think only his own thoughts" (Jean-Jacques Rousseau, cited in Ehrmann, 1983:r83). For Rousseau, man's principal problem is his inevitable disunity resulting from society. All intermediate associations between individuals and the state-the "partial societies" -are condemned as perverters of the general will. The state then becomes the only means-however imperfect-of overriding the divisive forces of particular wills and instituting a unifying general will. But to be unoppressive, the state must rely on the rule oflaw, failing the appearance of the Legislator, whose role resembles that of Plato's philosopherking. The rule of law in turn depends on civic virtue, hence the importance attached by the Jacobins to state education. The state at once embodies and also induces the general will.

Unity and Fragmentation of the French State / 31 The idea of the strong state has proved compelling in French history and politics and dates from well before Rousseau. The rise of modern French administration begins in the Middle Ages and continues through the Renaissance with the crown's struggles to subdue and control from the core a periphery that was often rebellious and always remote. Birnbaum (1982) argues that the presence of a state depends on resistance from the periphery during the emergence from feudalism. The stronger and more widespread the resistance, the stronger the central authority had to become to consolidate the realm (see also Wilsford, 1985). The intendants were early agents of this administration. They were sent out from the center to the periphery to rule in the name of the crown. These interzdants were early precursors to today's prefects. Indeed, one might distinguish between the rhetoric of absolutism and the reality of provincialism, resistance, and the constant problem of revolts (Dyson, I98o:I53). Mousnier (I970) emphasizes the continuing vertical lines of loyalty under the ancien regime and considers them holdovers from feudal organization of authority relationships. Similarly, Goubert (1969) sees absolutism as a process of dialogue between (often) opposing social forces. There seems little doubt that ideal absolutist rule was severely mitigated in practice by conflicts and subversion. Further, as Bendix has argued (I978), in one important way absolutist rule of the ancien regime was not absolutist, nor centralized, at all: to consolidate the realm and control localities, the crown was dependent on a far-flung network of intendants. But to be effective, intendarlts had to be granted a large measure of independence, for it was they who ruled, administered, negotiated, and adjudicated on the spot. The contradiction of decentralizing to rule from the center parallels prefect-community relations in France today (see Gremion, I976; Worms, 1966, I968; Pitts, I963). The French crown's activities gave rise early on to the growth of bureaucracy and centralization-in the armies, in finance, and in an array of interventionist techniques such as grants of monopoly, credits, and subsidies that were used to push nascent industries in the directions the crown saw fit. As Tocqueville argued (190T98-I28), the Revolution and Napoleon's subsequent rule did by no means raze the administrative edifice. Rather, the centralization of the administration was furthered. Napoleon, moreover, established the first grande ecolePoly technique-to provide him with the technical corps necessary to his vast projects. Napoleon also took the rationality of the Enlightenment, which has always informed the outlook of French adminis-

32 I Unity and Fragmentation of the French State

tration, to new heights through the Code Napoleon, the metric system, and numerous administrative innovations. This is also Jouvenal's interpretation: the French state's power has grown almost uninterrupted since the ancien regime. Both before and after the Revolution, the various governments and rulers of France have done whatever necessary to maximize the power of the state (cf. Jouvenal, 1949). In both the German and French conceptions of the state, a leading role has always been assigned to the public bureaucracy (Dyson, 1980: 1 57-58). Rousseau's notion of the general will as a social bond gave sovereignty to the nation through the state. Further, the Declaration of Rights, following Rousseau, stated, "The Law is the expression of the General Will." But putting into operation such slippery concepts poses problems. Whether the lawmaking instrument, for example, is an executive or a parliament, a parliament that follows the will of the people, or one that exercises independent judgment, has been a contentious question in French political history. Robespierre identified the general will as identical to the will of the Assembly. Its members, much like Burke's trustees, represented not individual interests, but the nation. The strong Assembly gave way to Bonapartist rule which eliminated participation in favor of a chief of state whose power rested on the direct will of the people, excluding intermediaries. With Napoleon the state becomes again identified with a single ruler, as it was identified under the ancien regime with the crown. And of course to rule over a large territory, the single ruler requires large teams of administrators and bureaucrats. The importance of the public bureaucracy as the chief agent of the state, in turn the embodiment of the public interest, becomes clearer. The state exemplifies that highest rationality. 2 The French state tradition, as the German, views the public bureaucracy as the guardian of the public interest. 3 The administrative corps is to be devoted to public service and the needs of the nation, made up of non-partisan actors in a politicized society, actors concerned solely with serving an enduring and definable public interest (Schonfeld, 1984:235). Much more than its American counterpart, the French bureaucratic corps sees itself as-and society sees it as-the enlightened interpreter of the volonte genera Ie. This bureaucratic mission means that French high functionaries feel that they act with the authority to perform a special duty. This duty involves the constant definition and defense of the general interest in the face of all who would assert particular or partisan interests contrary to the interests of the whole, or of France. This sense of mission is not

Unity and Fragmentation of the French State / 33 unlike the preaching, teaching, and proselytizing of a religious order. The order in French bureaucratic politics is the grands corps. Its training grounds are the grandes ecoles. The mission gives high functionaries in France the perception that the state has an interest that is both definable and defendable. It also shapes their understanding of where interests lie, which of these are compatible with the state's interest and what types of conduct by decisionmakers and outside groups are appropriate to this administrative-political universe: The ideology which justifies [the monopoly of the state] is that of the general interest. The [French 1 administration has in effect succeeded in taking over the general interest for itself. No one can incarnate the general interest in the place of the administration except perhaps the political power at the very top. Legitimacy is always on the side of the administration. Individuals, groups, collectivities and political representativeswith the exception of those who are part of the government, and even then ... -are always suspected of partiality. Thanks to this ideology, the administration can impose its vocabulary, its own mode of reasoning and its competence on the rest of society (Crozier, 1974:24). The emphasis on "texts" is a common feature illustrative of this French administrative process. In France, high civil servants often deal with groups' opposition by pointing to the "text." This conveniently removes direct responsibility from the civil servant, for he or she merely "administers," (gerer in French) a text that has previously been duly negotiated and approved. On gere les textes in the French administrative vocabulary. This approach neatly cuts off other avenues of possible recourse to the groups. In this system, the hauts jonctionnaires foster an image of themselves as remaining apart from politics and applying the law impartially. This view of the high civil service in France is also supported by a strong juridical administrative law tradition (see Schonfeld, 1984; Favre, 198 I). It is not important how much the view corresponds to descriptive reality. It is important that the view is widely shared as desirable. Rousseau's thought captures the profound contradictions which many see in the French, for it argues simultaneously for both the state-an overriding central organization-and the individual-"each citizen should think only his own thoughts." The fabulous contradictory formula of anticorporatism, glorification of the State, and individualism had its origins in part in the oppressive guild practices of the ancien regime (Ehrmann, I983:I82ff). The Chapelier law of the Revolution outlawed all associations. It was rescinded in 190I, but

34 / Unity and Fragmentation of the French State

French associations-all interest groups-are still required to register with the Ministry of the Interior, though legal status is automatic once registered. Since 1936 the ministry may also dissolve certain associations which it deems a threat to the state. This power was freely used after the events of May and June 1968. What is important to note about the French associative law, compared to the American context, is that it exists in the first place. Freedom of association is guaranteed, but surveillance of groups by the state, through registration, is also considered essential. The law is at once enabling and limiting. By contrast, the control of private associations in the United States is confined to regulation of lobbying and political campaign financing-and of course to the occasional and not inconsequential red-baiting by movements such as McCarthyism. The view of the state as the sole entity capable of embodying the collective interest is also manifested in French language. Etat in French is the only word for state which normally begins with a capital letter (Netd, 1968: 567) in contrast to other political vocabulary. Further, the expression "interest group" (groupe d'interet) is seldom used or even understood by the average educated French person. While the academic worlds of French political science and sociology know and use "interest group" terminology, its use there was adopted from American academic vocabulary. Far more common are "pressure group" (groupe de preSSiotl) and lobby, both pejorative expressions denoting a persistent action or influence which constrains or subverts. This pejorative view of interest groups changes the vocabulary used in describing what interest groups do, as well. In French, groups do not "articulate" their "interests," they deftndent leurs droits, or defend their rights. Indeed, understanding politics in France necessitates understanding the importance of droUs, or rights. The system of droits acquis means that interests are not interests but rights. Otherwise they would signify particular wills, partial societies, and a host of concepts tied to a state of nature, free market view of man and politics. Droits, on the other hand, are acquired by decision ifthe state in its incarnation as the expression of the general will, or public interest. That is, they are given. As such, they may be taken away. Hence deftndre. Interest groups in France must constantly justify their pursuit of interests. In the strong state tradition, justification is accomplished in part by this vocabulary.

ADMINISTRATIVE FRAGMENTA TION

Perhaps the most influential recent critique of the received view of the French state is Suleiman (1970). The ideal-typical Rousseauian view

Unity and Fragmentation of the French State / 35 of the strong state stresses the state's proper independence and autonomy in defining and defending the general will. This view emphasizes the unity of state structures and is supported by the dominance of a highly sophisticated juridical tradition in French administrative science. This tradition places great emphasis on the study of formal rules and procedures. Suleiman argued, however, that this view of the French state was misleading and that the scholarly emphasis on the study of formal rules and procedures was misplaced. For Suleiman, the "sacrosanct state" constituted neither a good description of French administration nor a good prescription. In later work (1974), Suleiman showed that the French administration was not homogeneous nor nonpartisan, but made up of cross-cutting, conflicting interests. Hauts Jonctionnaires are not impartial servants of infallible, uniform legal structure. Their views and goals conflict across ministries and directions, between directions and ministerial cabinets, and between grands corps. One locus of constant combat, for example, lies between the finance and other ministries (Ehrmann, 1961a). By pointing up heterogeneity, this view stresses the fragmentation of the state. Crozier (1963) had begun chipping away at the traditional, sacrosanct view of the French state with his argument that formal rules do not fully account for administrative behavior. While organizations such as bureaucracies have extensive, detailed rules to prescribe appropriate action for all situations, these rules inevitably fail because of unanticipated events the rules do not provide for. The administrative machine breaks down, prompting a modification of the rules or the addition of new ones to take care of problems. But in a vicious cycle, unforeseen events continue to occur, leading to new crises. Routine, where formal rules are valid descriptions of administrative behavior, alternates with crisis, where innovation and adaptability-departure from formal rules-reign. Crozier's model of French administrative behavior stresses the heterogeneity of the administrators and their interests, depending upon their positions within the administration. While detailed and precise rules are persistently promulgated to govern behavior, and while decisionmaking is in principle centralized, in fact various strata of the administrative hierarchy are highly isolated from each other. Within each stratum a premium is placed upon egalitarianism which leads to the refusal, or avoidance, of cooperation and participation in hierarchical decision making. Thus the bureaucratic system cannot cope with change and postpones change as long as possible. Only eruption of crisis forces change, which is imposed from the top, ensuring its inadaptability to individual requirements.

36 ! Unity and Fragmentation of the French State

Dupuy and Thoenig (1983) criticized Crozier for neglecting the administrative organization's capacity to adapt. They argued that French administration has mechanisms which adjust decision and rulemaking mistakes to make them tolerable to outside actors who must interact with the administration. As Schonfeld (1984)4 notes, their argument is less a critique of Crozier than an extension of his work, for theirs is a model of administrative interaction with the outside world, while Crozier confined himself to internal dynamics. Indeed, Dupuy and Thoenig follow Crozier and Suleiman in portraying a bureaucracy frequently at odds with itself and open to influences from outside.

THE STATE AND ITS TACTICAL ADVANTAGES

The traditional and opposing views capture two faces of the French state. An exploration of the state's "tactical advantages" can reconcile the two views so that sufficient importance is accorded to the fact that strong states can do things that weak states cannot but that equally there are important limits to strong state power. The French state, insofar as its authority is concentrated in bureaucrats and bureaucratic departments, supported by a strong state ideology, enjoys an upper hand in politics. "Impermeable," often used to describe a strong state, is not adequate, for it denotes the impossibility of penetrating the state's structures. In the strict sense, no modern state is "unified"; every modern state is fragmented. But the strong state's tactical advantages over politicians and interest groups shape politics in important ways. By contrast, the American state-with its widely dispersed and deeply fragmented authority structure (cf. Neustadt, 1960; Heclo, 1977, 1978; King, 1978; Rockman, 1981)-enjoys fewer tactical advantages. The state tradition and the mechanisms inherent in the state's organization of authority provide constraints and opportunities which structure but do not determine interest group behavior and policy outcomes." Tactical advantages are methods and procedures and the capacity to employ them for short range objectives. They mayor may not be combined over time in the planning or maneuvering to achieve long range objectives or strategy. When sufficiently numerous, they suggest the state's superior position in arranging relationships between the state and groups in civil society. The idea implies that states with tactical advantages may more easily arrange their relationships with interest groups and that strong states are strong in part because they

Unity and Fragmentation of the French State / 37 have more tactical advantages at their disposal. Thus they may more often gain the ends they seek because of methods and procedures at their disposal that weak states do not enjoy, at least to the same extent. 6 The notion of tactical advantages avoids determinism wherein the various parts of the state are taken as a unit always acting in concert and wherein politicians and interest groups only win if the state wants them to, which is what unified and impermeable imply. Tactical advantages possessed by strong states mean that compared to weaker states, politicians and interest groups have to work harder or differently in pressing their case. This does not mean they will not win. It is still difficult to grasp practically what a strong or a weak state is. Tactical advantages constitute an heuristic device for beginning to do this.

WHAT ARE THE FRENCH STATE'S TACTICAL ADVANTAGES?

[The state 1 represents not only a particular manner of arranging political and administrative affairs and regulating relationships of authority but also a cultural phenomenon which binds people together in terms of a common mode of interpreting the world (Dyson, 1980: 19). In his seminal work on Western European states Dyson distinguishes between "state" and "stateless" societies. By these he means no more than the difference between societies which have an historical and intellectual tradition of the state as the institution which embodies the public power and societies which lack this tradition. Dyson's distinction is analogous to that of strong and weak state used here. 7 The strong state is not omnipotent nor is the weak one powerless. Rather, the distinction signifies varying conceptions and realities of general state authority vis-a-vis interest groups. The collective conception of a strong state, and the formal institutional arrangements that back it up, assign the strong state more tactical advantages than its weak counterpart. This does not mean that the strong state will always win its political battles against interest groups, nor does it mean that the strong state can even always or usually decide itself upon a unified position to take with an interest group or set of groups on an issue. Nor does it mean that the state does not help interest groups or vice versa. Relations of mutual support abound in France, as in all countries. But it does mean that the strong state has advantages in its dealings with interest groups that the weak state lacks. The importance of the state is not in acting homogeneously or J

38 / Unity and Fragmentation of the French State

monolithically in promoting or arranging at its will a universe of interest group activities and thus, perhaps, policy outcomes. Even in the strong state, agencies and departments are often motivated by conflicting interests and pursue conflicting goals. And in the absence of conflict, they may simply be inefficient. Rather, the state is important as a collective concept which informs the way interest group and bureaucratic actors view proper relations between the state and groups. Thus, as Dyson argues, "the values, beliefs and expectations characteristic of ra1state tradition of authority ... affect groups' perceptions of their interests . ... The idea of the state forms part of the considerations which groups have in mind when determining where their interests lie and what types if conduct will appeal to decision-makers and the public" (1980:3; my emphasis). The French state is empirically a specific formal organization of authority distributed among specific organizational structures. Authority and structure are complemented by specifiC (empirical) sets of behavior patterns, of those who fill the roles of the state and of those, like interest groups, who interact with the state's officials in the hope of influencing certain decisions. Behavior and attitudes inform authority's organization; similarly, the organization of authority informs behavior and attitudes. How does state organization of authority influence interest groups' behavior in France? It does so with inducements and constraints which structure political action. Its authority position gives the French state tactical advantages. Claiming neither an exhaustive list, nor that they work in the same way on every issue, some of the important tactical advantages of the French state are (I) the government's proposal and decree powers, (2) an arena legislature, (3) a strong executive independent of the legislature, (4) the tradition of powerful ministerial cahinets, (5) an extensive bureaucratic elite homogeneously trained, and (6) a judiciary of limited powers. 8 We will also see subsequently that the French state is abetted in its use of these tactical advantages by both ideological and nonideological fragmentation of most interest sectors, including the medical profession. The Government's Proposal and Decree Powers First, the 1958 constitution gives the executive in France the preeminent position in lawmaking. The executive can intervene in the parliamentary process and it has extensive powers of decree. The government is the master of the legislative process in France. It fixes all

Unity and Fragmentation of the French State / 39 agenda items and the order of their consideration in both the Assembly and the Senate. The government may also circumvent the regular committee process by invoking parliamentary consideration of the original text submitted by the government. The government itself, on the other hand, may amend any text being considered at any time. Executive decrees also permit the government to modify laws in many areas and are juridically binding. Laws modified by decree are often decades old. Decrees in France combine implementation regulations and independent lawmaking. The 1958 constitution permits vast domains of policy making to be regulated by executive decree. An Arena Legislature Polsby (1975) has argued that a useful way of comparing legislatures is to place them along a continuum from trans formative to arena institutions, expressing variations in the legislature's independence from outside influences (1975:277). The trans formative legislature puts its own imprint on legislation-by originating it, modifying it, or killing it. That is, the content oflegislation and the outcome of the legislative process is in significant ways transformed by the legislative body. By contrast, the arena legislature cannot place its own substantive institutional imprint on legislative outcomes because it lacks the powersformal or informal-to do so. Rather, it serves as an arena for conflict between other power centers. In the arena legislature, political forces come together to hash out issues over time. In these terms, the 1958 constitution transformed the French parliament from a transformative to an arena legislature. This has in turn transformed the policymaking process. In the Fourth Republic, interest groups pressured parliament, especially individual deputies, because party discipline was weak. Some parties were little more than electorally organized interest groups. Interest groups and political parties also collaborated for electoral purposes. Poorly organized interest groups concentrated pressure on bureaucrats who in turn pressured the administration for them. Since I958, interest groups must concentrate almost exclusively on ministers and bureaucrats. There is also less collaboration between interest groups and candidates or political parties for electoral purposes (Meynaud I962a, I962b; Wilson 1983, I988). But even with the Fourth Republic's transformative legislature, functionaries became more important to interest groups as the state extended and its work became more technical. In economics and finance, for example, "complexity has reduced the role of Parliament

40 / Unity and Fragmentation of the French State

[during the Fourth Republic] to the benefit of the executive" (Meynaud, 195T574-7S). The phenomenon was accentuated by the instability of governments under the Fourth Republic. They rose and fell according to constantly shifting parliamentary coalitions. Higher civil servants were, by contrast, stable. 9 As Ehrmann argued, "[Under the Fourth Republic] reasons for political disorder had not been removed and no disciplined majority emerged in parliament [so] constitutional provisions were flouted. Using only slightly different techniques than before the war, parliament found ways to surrender its sovereign powers as the law-making authority to the executive. Yet as if to compensate for such weakness, it continuously shortened the life span of succeeding governments" (Ehrmann, I983:304). In the Fifth Republic parliament is restricted to meeting a maximum of six months of the year so that "the government has the time to reflect and to act" (Debre, 1966:46; my emphasis). Not only have interest groups adapted to changes in institutional paths of access from the Fourth to the Fifth Republics, moving from legislature to administration, it is debatable how transformative the legislature of the Fourth Republic was. In both regimes evidence suggests that the state administration held a preeminent position in policymaking. A Strong Executive Independent of Parliament Third, the president in the Fifth Republic enjoys a power base independent of the legislature, for he or she is directly elected for a sevenyear term. Deputies' terms may last no more than five years. (Senators serve nine-year terms, but are elected indirectly; in lawmaking, the Senate is less important than the National Assembly.) The president may also dissolve the Assembly. In the Fourth Republic parliament directed the state politically, whereas the Fifth Republic places paramount political control in the executive. This control is centered in the president. Until 1986, despite the prime minister's strategic position and wide range of duties, the president has controlled the cabinet in both its makeup and its action. The strengthening of the executive and the weakening of parliament by the I 958 constitution make the actions and decision making of the French state more coherent and efficient. 10 The Tradition of Powerful Ministerial Cabinets Fourth, the tradition of powerful ministerial cabinets focuses the political direction of French administration. The French ministerial cabinet

Unity and Fragmentation of the French State / 4I is a cohesive decision making and policing unit serving the minister and is separate from functional units in the ministry. The French minister has great freedom to compose his cabinet as he wishes and its members work for him On changing tasks. They also check On heads of functional departments, or directions, to ensure that directors act in the minister's interest, political or other. The cabinet, a mix of political and technical brains chosen by the minister, is designed to focus the minister's directives effectively. It also serves as the center for interministerial bargaining. By COntrast with the American state, where unclear boundaries of authority and fragmented power centers accentuate the difficulties of political direction of bureaucratic policymaking and implementation, the cabinet gives the French minister an instrument of focused control over bureaucrats. Further, the Fifth Republic cabinet, or Conseil des Ministres, like its British and unlike its American counterpart, constitutes a generally effective decision making team under the direction of the president (or the prime minister) and adheres to a doctrine of cabinet responsibility. 11

An Extensive Bureaucratic Elite Homogeneously Trained The structure of the bureaucratic corps in France gives the state an additional tactical advantage over groups in the society and the eCOnomy. Le droit administratif in France, the hauts jonctionnaires and their grandes ewles clearly constitute a powerful ensemble of discipline, science, doctrine, and profession. Future high-ranking civil servants go through a rigorous and highly developed training and socialization process in a limited number of advanced state schools. The grandes ewles feed into the grands corps and form an administrative technocracy that is much more cohesive in its values and norms than its American counterpart. Two grandes ecoles dominate the education of future high functionaries-and not incidentally that of future high executives and scientists in French industry-and they feed into a limited number of top corps. The Ecole Nationale d'Administration trains those who enter the Inspection des Finances, the Conseil d'Etat, and the Cour des Comptes. Poly technique trains those who will join the Corps des Mines or Ponts et Chausses. Entrance is strictly limited and rigidly controlled through competitive examination. Both schools emphasize a curriculum of rational science, one administrative science and the other natural and engineering science. These orient problem-solving toward activist in-

42 / Unity and Fragmentation of the French State

terventionism and a belief in the value of systematic analysis and the powers of reason and intelligence in confronting problems of all kinds (cf. Bodigucl and Quermonne, 1983). In administrative sciences the number of classic texts is great, their codification advanced, their sophistication remarkable, and their authors illustrious. This "corps phenomenon" in France is characterized by an insular separation from the outside world (especially from civil society, and even, sometimes, from duly elected politicians), a maintenance of prestige through a strict limiting of numbers, a cultivation of an attitude of special privilege and duty, and a profound internalization of an ideology of public service in the general interest (cf. Birnbaum, 1978:70-73). The importance of this bureaucratic corps and its common training in the grat/des ecoles is that administrators-bureaucratic, political, and the combination found in the ministerial cabinets-share a common view of the role of the state, its mission, and its options, even if there are different interests and conflicts over them from one ministry to another, from one direction to another or between a direction and a cabinet. The values, beliefs, and expectations characteristic of a state tradition of authority and its training grounds (the grandes ecoles) affect bureaucrats' perceptions of their interests and of the state's interests. Indeed, it gives them a perception of the state having an interest that is definable and defendable. The idea of the state shared by bureaucrats who staff its positions shapes their judgment of where interests lie, which of these are compatible with the state's interest, and what types of conduct by decisionmakers and the public are appropriate to the administrative-political universe. A Judiciary of Limited Powers Finally, in conflicts with groups, the French state, like the British, enjoys an advantage which its American counterpart has lacked since Marbury v. Madison: a judiciary of limited powers with little tradition of judicial review. This subordinate and often downright weak judicial power dates from the French absolutist state (see Anderson, 1974). The Revolution strengthened the asymmetry between judiciary and executive or parliament even though it put forth certain citizen rights in the Declaration of the Rights of Man. Freedom of thought and expression, freedom to own property, freedom from arbitrary detention, and the presumption of innocence until proven guilty were all mentioned. Article 2 carried citizen rights furthest by proclaiming that the fundamental purpose of political organization was to preserve the

Unity and Fragmentation of the French State / 43 individual's natural rights, including the right to resist oppression. But absent were any provisions for judicial appeal when these rights were violated. In general, the executive or the legislature as the sovereign incarnation of Rousseau's general will both determined the general interest and protected individual rights. But protecting individual rights was secondary. This led to many contradictions because the sovereign power often proclaimed that the general will, or public interest, superseded individual rights. This problem is compounded by the Rousseauian view of rights, inalienable in the American vocabulary, as fosterers of disunity. Not until the Third Republic were individual liberties extended in more specified ways with guarantees of right of assembly and press freedom in 1881, of formation of trade unions in 1884, of association without prior government approval in 1901, and of religious freedom in 1905. The Constitution of the Fourth Republic in 1946 added equal rights for women, the right to employment, to collective bargaining, and to strike (Hayward, 1973:199), but no institutional enforcement of these rights was provided as they were enacted. The 1958 Constitution continues the tradition of limited judicial review. A constitutional council may pass on the constitutionality of parliamentary laws. But the executive is not subject to review by it. Originally only the president, the prime minister, and the presidents of the Senate and the National Assembly could refer questions of constitutionality to it. In 1974 a provision was added permitting sixty deputies or sixty senators to submit cases. 12 Executive behavior is the preserve of the Council of State, a multifunctional administrative court. The government consults the Council on bills it wishes to submit to parliament and on more important decrees and regulations as they are prepared. The Council also advises on the interpretation of the constitution. While the Council's advice is not binding, Ehrmann notes (1983:334) that "its prestige is so high that its recommendations are seldom ignored." The Council also rules on claims of citizens or groups against the administration. The Council may find official acts illegal-whether those of a minister or a mayor-and annul them and grant damages to plaintiffs. While this function has led the Council to be described as "the great protector of the rights of property and of the rights of the individual against the State, the great redresser of wrongs committed by the State" (Barthelemy, 1924:199; cited in Ehrmann, 1983:334), it is nevertheless limited. Enforcement of its decisions depends on the very administration which may be the object of the ruling. The government often validates

44 / Unity and Fragmentation of the French State

questionable administrative acts by legislation during or after the Council of State's consideration of them. Administrative departments, particularly the finance ministry, are skilled at circumventing decisions. Perhaps a third of Council decisions remain unenforced (Hayward, 1973:127). Further, delay is significant. The Council's case backlog is estimated at three years. Currently 17,000 cases awaitjudgment. Yet government reforms aimed at expanding the Council's juridical capacity have met opposition from the Council's own members, who jealously guard their elite status (Le Monde, March 15, 1985). Ideological Fragmentation of Interests Ideological fragmentation of interest sectors in France abets the state's use of its tactical advantages. From labor unions to medical associations, the lines of demarcation which distinguish interest groups from each other within an interest sector tend to fall not according to functional categories, although these exist as well, but along ideological cleavages. For example, while less than 20 percent of the French industrial work force is unionized, at least three major unions, the Confederation Generale du Travail (CGT), the Confederation Franstern Industrialized Nations (Berkeley: University of California Press). King, Anthony (1978). "The American Polity in the Late 1970s: Building Coalitions in the Sand," in Anthony King, ed., The New American Political System (Washington, D. c.: American Enterprise Institute) 37196. Klarman, Herbert (1965). The Economics qf Health (New York: Columbia University Press). Klein, Rudolph (1981). "Reflections on the American Health Care Condition," in Barry Checkoway, ed., Citizens and Health Care: Participation and Planning Jor Social Change (New York: Pergamon). - - - (1983). The Politics qf the National Health Service (London: Longman). Klinkmiiller, Erich (1986). "The Medical-Industrial Complex," in Donald W Light and Alexander Schuller, eds. Political U/lues and Health Care: The German Experience (Cambridge, Mass.: MIT Press). Kolko, Gabriel (1962). Tfi>alth arid Power in America: An Analysis qf Social Class and Income Distribution (New York: Praeger). Kosterlitz, Julie (1988). "The Coming Crisis," National Journal (August 6) 2029-32. Krasner, Stephen D. (1977). "Domestic Constraints on International Economic Leverage," in Klaus Knorr and Frank N. Trager, eds., Economic Issues and National Security (Lawrence: Regents Press of Kansas) 16081.

- - - (1978). Defending the National Interest: Raw Materials Investments and U.S. Foreign Policy (Princeton, N.].: Princeton University Press). Kurth, James (1979). "The Political Consequences of the Product Cycle: Industrial History and Political Outcomes," International Organization 33 (Winter): 1-34· Kvistad, Gregg O. (1986). "Radicals and the State: The Political Demands on West German Civil Servants," presented to the American Political Science Association, Washington, D.C. (August). Lacronique, Jean-Fran~ois (1982). "The French Health Care System," in Gordon McLachlan and Alan Maynard, eds., The Public/Private Mix Jor Health (London: Nuffield Provincial Hospitals Trust). Lagoe, Ronald]. (1986). "Differences in Hospital Discharge Rates," Medical Care 24 (September) 9:868-72.

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- - - , and Alexander Schuller, eds. (1986). Political values and Health Care: The German Experience (Cambridge, Mass.: MIT Press). Lijphart, Arend (1985). "From the Fourth to the Fifth Republic-And to the Sixth? A Note on Regime Change and Regime Continuity," French Politics and Society 11 (September) 24-30. Lincoln, Edward J. (1988). Japan: Facing Economic Maturity (Washington, D.C.: Brookings). Lindblom, Charles E. (1965). The Intelligence cfDemocracy: Decision Making through Mutual Adjustment (New York: Free Press). - - - (1977). Politics and Markets (New York: Basic Books). - - - and David Braybrooke (1963). A Strategy cf Decision: Policy Evaluation as a Social Process (New York: Free Press). Lipset, Seymour Martin (1977). "Why No Socialism in the United States?" in S. Bialer and S. Sluzar, eds., Sources cf Contemporary Radicalism (Boulder, Colo.: Westview Press). Lister, John (1986). "The Politics of Medicine in Britain and the United States," New England Journal cf Medicine (July 17) 168-74. Lorwin, Val (1954). The French Labor Movement (Cambridge, Mass.: Harvard University Press). Lowi, Theodore (1969). The End cfLiberalism: Ideology, Policy and the Crisis cf Public Authority (New York: W W Norton). Lustig, R. Jeffrey (1982). Corporate Liberalism: The Origins cfModern American Political Theory (Berkeley: University of California Press). McConnell, Grant (1966). Private Power and American Democracy (New York: Knopf).

References I 341 McCormick, Janice (1981). "Gaullism and Collective Bargaining: The Effect of the Fifth Republic on French Industrial Relations," in William G. Andrews and Stanley Hoffman, eds., The Impact if the Fifth Republic on France (Albany: State University of New York Press). Madsen, Richard (n.d.). "Contentless Consensus: The Political Discourse of a Segmented Society" (San Diego: University of California). Magagna, Victor (n.d.). "The Uncertain Arena: Max Weber and Parliamentary Politics" (Berkeley: University of California). Marmor, Theodore R. (1970). The Politics if Medicare (London: Routledge and Kegan Paul). - - - and Amy Bridges (1980). "American Health Planning and the Lessons of Comparative Policy Analysis, " Journal if Health Politics, Policy and Law 5 (3) 419-30. - - - , Wayne L. Hoffman, and Thomas C. Heagy (1983). "National Health Insurance: Some Lessons from the Canadian Experience," in Theodore Marmor, ed., Political Analysis and American Medical Care (New York: Cambridge University Press). Massigli, Rene (1958). Sur quelques maladies de l'Etat (Paris: PIon). Massot, Jean (1977). La presidence de la Republique en France (Paris: Documentation Fran